Any settlement would have to deal with liabilities and assets together. Different methods, such as population, economic share, historical contribution or benefit received, produce different answers.
The asset side includes federal land, buildings, infrastructure and equipment in Alberta, interests in Crown corporations, and a share of federal financial assets.
Military facilities on Alberta land such as Cold Lake, Suffield, Wainwright and Edmonton are particularly significant because they would also affect the cost of a future defence force.
The Library of Parliament attributes about C$1,217 per Albertan of federal debt interest to Alberta, roughly C$6.2 billion a year [LoP-26]. Section 4 uses that amount as a stress test, not a forecast.
The actual result would depend on the debt principal, the interest rate and the value of federal assets transferred to Alberta.
These sections are costing models. Each one picks a plausible version of something Alberta does not do today, so that the ledger has a real number in it rather than a blank.
A range of settlement outcomes
No debt-and-asset settlement has been negotiated and the outcome cannot be known in advance. Different allocation methods produce materially different results, so the analysis does not rely on any single outcome. It tests a range.
The Library of Parliament attributes federal debt interest of approximately C$1,217 per Albertan, about C$6.2 billion a year across Alberta’s population [LoP-26]. That is a population-share allocation, and this paper treats it as the ceiling.
An allocation weighted to economic size rather than to people is sometimes suggested, and this paper does not treat it as a defensible planning basis. Federal debt was incurred to fund programmes delivered to persons, and it is persons who carry the obligation. Charging Alberta a share scaled to its output would charge it twice over: once through decades of net fiscal contribution already transferred out of the province, and again through a debt share calculated on the very output that generated those transfers.
If historical contribution were given any weight at all, it would argue for a discount below population share, not a premium above it.
| Settlement basis | Annual debt cost | Remaining capacity, low case | Remaining capacity, high case |
|---|---|---|---|
| No debt share assumed | C$0.0B | C$22.2B | C$32.1B |
| Negotiated discount for historical net contribution | C$3.1B | C$19.1B | C$29.0B |
| Population share - the attributed amount, and the ceiling used here | C$6.2B | C$16.0B | C$25.9B |
Population share is derived from the Library of Parliament attribution [LoP-26]. No value is credited anywhere in this paper for the federal assets that would transfer in any settlement, so every row above is stated without an asset offset.
Across every basis the paper is prepared to defend, the annual balance remains positive. The debt question changes the size of the result. On these assumptions it does not change the answer.
Any settlement would also transfer federal assets. Land, buildings, infrastructure and equipment in Alberta, interests in Crown corporations and a share of federal financial assets would all be in scope, and the military estate at Cold Lake, Suffield, Wainwright and Edmonton is significant enough to affect the cost of a future defence force. No value for any of it is credited anywhere in this paper.
